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Carl Icahn praises Apple but wants more buybacks

Tim Bradshaw
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Apple is the sort of company that comes along only a couple of times a century, Carl Icahn said over the weekend, but the activist investor said he is still pushing the group to use its cash to buy back more shares.

Speaking on Wall Street Week, Mr Icahn said he has not sold any Apple stock even though the value of the initial stake he took in August 2013 has almost doubled. He said he wished he had bought even more shares.

"Every 50 years, you get a company like this that has everything going for it," he said. "I feel so secure with Apple that if it goes down, I just buy more."

Carl Icahn said he has not sold any Apple stock even though the value of the initial stake he took in August 2013 has almost doubled. 

After public pressure from Mr Icahn and others, Apple last week said it would increase the capital it returned to investors by more than 50 per cent to $US200 billion by the end of March 2017, $US140 billion in share repurchase and an 11 per cent dividend increase.

In the television interview, Mr Icahn also warned that private investors were at risk from the "ridiculously high" junk bond market, likening the situation to the housing bubble in 2008. He is the latest high-profile investor to warn about junk bonds on the programme after DoubleLine founder Jeffrey Gundlach said last month they were brewing a financial crisis.

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Mr Icahn's initial stake was valued at about $US1 billion in August 2013 but he added to that by early 2014, taking his stake to $US3 billion. In February, he said he owned around 53 million shares, the value of which had by then climbed to $US6.5 billion.

Apple's stock rose by 3 per cent on Friday to close at $US128.95, close to its all-time intraday high of $US134.54.

Even at these levels, Mr Icahn said that its share price was "absurd". He has previously suggested that the group's valuation could increase to $US1 trillion. He plans to publish an "in-depth report" on Apple, he said on Twitter last week.

But Mr Icahn said he still wants Apple to buy back more of its own stock. "I'd always like to see bigger buybacks," he said.

Mr Icahn also used the television show to reiterate his backing of chief executive Tim Cook's leadership of Apple after it reported record iPhone sales and profits for its quarter ended March, thanks largely to growth in China.

When Mr Icahn first took a position in Apple, "there were guys calling me and saying, 'We've got to get rid of this Tim Cook'," Mr Icahn said. "I met him and he's great . . . guy lives this, he breathes it, he's obsessed with it."

He admitted his bet on Apple was not without risk. "Could something happen? Yeah - this isn't a game that can't lose," he said, noting that Apple's stock price had fluctuated dramatically in the past few years.

Financial Times

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